Infosys: The Grandfather of IT Startups
Spearheading and re-defining the technological and entrepreneurial landscape of the country, Infosys has become a name synonymous with innovation, reformation, and trust. Started with a vision to capitalize on the booming IT sector by an ardent group of seven software professionals, Infosys is one of the few giant corporations of this country that has the ability and potential to steer the roadmap of the nation and paint a perspective-changing picture of India in front of the world. Advancing and placing the nation right at the forefront of the digital revolution, India is no longer a land of snake charmers and beggars to the outsiders, but an IT hub with enormous potential still untapped.
With the revenue exceeding $12.4 billion and market capitalization being north of $45 billion, Infosys competes in the league of the largest software corporations in the world. Yet its beginnings couldn’t be more humble. The second-largest Indian IT company (after TCS) was the brainchild of Narayan Murthy in collaboration with six of his colleagues, including the IIT-B graduate Nandan Nilekani. All the co-founders reckoned the impact and growth the embryonic software industry would experience in the nearing future, by observing the expanding demand for customized software in the market. Initiated with a paltry Rs. 10,000 (or $250) that Murthy loaned from his wife, the company began its operation in Pune in 1981, and later relocated its office to Bangalore, the upcoming Silicon Valley of India.
A company that provides business consulting, information technology, supply chain, and outsourcing services, Infosys has now become a household name, though it tackled a lot of rocky waves in its sailing. The startup undersubscribed in its Initial Public Offering (IPO) in 1993 and had to be ‘bailed out’ from bankruptcy by Morgan Stanley that claimed 13% of its equity at the offer price at $7.4, instead of the book price $1.6. Yet the company revived, gained momentum, and within a short span of 6 years, Infosys shares traded the costliest at NASDAQ, becoming one of the biggest 20 companies on the American stock exchange.
Providing software development, maintenance, and independent validation services to companies in sectors like finance, insurance, and manufacturing, Infosys carried on its remarkable and aggressive growth to touch the billion-dollar revenue mark in 2004 and transcended the $10 billion figure in the financial year 2017. At the nucleus of this transformation laid the 1978 batch alumnus in electrical engineering, Mr. Nandan Nilekani. Being the CEO of the company in its most crucial and torrid years from 2002 to 2007, Nilekani marshaled the Infosys topline six-fold to surpass $3 billion. Before assuming the leadership, he was also involved in pivotal responsibilities including being the managing director, president, and chief operating officer at different timelines. He was further reinstated as the non-executive chairman of the company in 2017, and is charged with revitalizing Infosys.
Nilekani ventures as an entrepreneur, bureaucrat, and politician, having contested the Lok-Sabha elections for the Indian National Congress, from Bengaluru South constituency in 2014. Despite his defeat by a considerably large margin, his fervor to bring about a visible change in the nation, had him installed as the head of the Indian Technological Committee TAGUP, and as the chairman of the Unique Identification Authority of India (UIDAI), under whose tenure he enforced the largest biometric ID system in the world. In order to effectuate the process, he left his role as a CEO in Infosys and addressed the key challenges that arose in the path of setting up the Aadhar system, that saved billions of dollars of the nation. To give an idea of the scale of the project, Nilekani had to implement a setup, a part of which would include comparing and eliminating duplicates in the database, demanding the processing of around 500 trillion new user matches everyday. The Aadhar system, nonetheless, became one of the most efficiently implemented large scale identification exercises, as at its peak there were 1.5 million successful enrolments per day, with the effective cost being brought down to just a dollar per person. It became the biggest KYC platform in the world, becoming a basis for direct benefit cash transfer system (through Jan-Dhan scheme) and vastly propelled the digitization of India.
For his efforts and work, and the society, Nilekani received multiple accolades including the Distinguished Alumnus Award from his alma mater in 1999. Furthermore, he was granted the Forbes ‘Businessman of the Year’ title in 2005 and earned a mention in the Time 100 list of ‘World’s Most Influential People’ in 2006 and 2009, published by the Time’s Magazine. Being the author of ‘Imagining India’, his other notable achievements include being listed amongst the top 50 most powerful people in the world by India Today, the Joseph Schumpeter Prize in economy and politics in 2005, and being listed as one of the Top 100 Global Thinkers in 2010 by the Foreign Policy magazine. In view of his outstanding contributions to both the society and the industry, he was the recipient of India’s highest civilian honor, the prestigious ‘Padma Bhushan’ in 2006.
He has also very generously participated to opulently contribute towards the development of several establishments in the institute including KReSIT, SINE, the Hostel 8 reconstruction, the Vanvihar Guesthouse, and the Infosys Fellowship Award for research work at KReSIT in the field of Information Technology. Nilekani has also involved himself in many philanthropic programs, signing the Giving-Pledge in 2017 to donate his 50% of his net worth. Figuring as the 78th richest Indian person in the Forbes list, he has a net worth of nearly $2 billion dollars, with the Nilekani family holding a 2.31% stake in Infosys. Being an avid investor, he has backed more than 12 startups to date, including Fundamentum, a $100 million venture capital fund aimed at boosting technological companies.
From facing crisis days like the dissolution of Infosys’ partnership with the Kurt Salmon Associates (KSA) making Infosys flounder, to the glory days where Infosys set new precedents and benchmarks, Nilekani has stood rock-solid behind the organization. The difficult times the company faced in the initial days could be gauged by the fact that it took two years for Infosys to raise funds to import its first computer, a Data General 32-bit MV8000. It had to win and serve its first client, Data Basics Corporation from the United States, without owning a computer. Despite persistent failures after eight years of trying to bring up a company, shambling business and deserting cofounders, Nilekani’s and Murthy’s faith in his vision of constructing an indigenous IT conglomerate inspired their colleagues to hold on.
The seeds of Infosys’ enormous growth began to germinate. Re-entering the US market through Data Basics Corp as a software developer, Infosys had formed a joint venture with Kurt Salmon Associates to handle marketing in the United States. This is how Infosys established itself in the US market. Yet, it was the economic liberalization that provided impetus to its growth, especially certain financial regulations like easier bank sanctions, and open markets. The organization nevertheless had to overcome many obstacles faced during scaling up, like talent hiring, strategic investments and handling budgets and resources efficiently. Today, Infosys being India's second-largest software exporter, handles clients and has offices all over the world, including countries like Germany, Australia, Sweden, China, etc. With about two-thirds of its revenue coming from corporate clients like Reebok, Visa, Boeing, Cisco Systems, Nordstrom and New York Life, the company even capitalizes on time zone differences to create a 24-hour workday. Owing to the relentless grit and determination of its co-founders, Infosys has become the largest publicly traded IT services exporter in India, providing services to 315 large corporations, such as GE and Nortel, predominantly in the USA, raking in more than $2 billion in profits.
Infosys has also found great traction with job seekers with the company being voted as “the most respected company” and the “best to work for” by several publications. The company was the introducer of many corporate practices in the country, like ESOP, investing in leadership development, and trading on NASDAQ. Despite slightly poor employee attrition rates, the company has invested handsomely in training programs, like building the largest corporate university at Mysore. In addition, it donates generously to healthcare, education, and rural development through the Infosys Foundation, promotes the startup culture in the country through the ‘Innovate in India’ fund, and rewards the top researches in the nation through the prestigious Infosys Prize.
For creating such a pioneering impact in both the industry and the society, Infosys has been bestowed upon with many prizes, most notably being ranked as the 3rd Best Regarded and the 19th most innovative Company in the World by Forbes. This software giant has grown at a very commendable rate. Infosys, fuelled by the relentless grit and persistence of co-founders like Nilekani, has set an example to the world and undoubtedly proved that with the desire to succeed and the will to work arduously, the impossible will turn into ' I'm ’ possible!